Marquette Sports Law Review Volume 18 Article 7 Issue 1 Fall Disbarring Jerry Maguire: How Broadly Defining "Unauthorized Practice of Law" Could Take the "Lawyer" Out of "Lawyer-Agent" Despite the Current State of Athlete Agent Legislation Jeremy J. Geisel Follow this and additional works at: http://scholarship.law.marquette.edu/sportslaw Part of the Entertainment and Sports Law Commons Repository Citation Jeremy J. Geisel, Disbarring Jerry Maguire: How Broadly Defining "Unauthorized Practice of Law" Could Take the "Lawyer" Out of "Lawyer- Agent" Despite the Current State of Athlete Agent Legislation, 18 Marq. Sports L. Rev. 225 (2007) Available at: http://scholarship.law.marquette.edu/sportslaw/vol18/iss1/7 This Comment is brought to you for free and open access by the Journals at Marquette Law Scholarly Commons. For more information, please contact [email protected]. COMMENT DISBARRING JERRY MAGUIRE: HOW BROADLY DEFINING "UNAUTHORIZED PRACTICE OF LAW" COULD TAKE THE "LAWYER" OUT OF "LAWYER-AGENT" DESPITE THE CURRENT STATE OF ATHLETE AGENT LEGISLATION I. INTRODUCTION In 1995, moviegoers watched as fictional agent Jerry Maguire waltzed out of his plush window office at Sports Management International to represent athletes independently. 1 However, from the time Jerry Maguire was representing "The Great Rod Tidwell ' 2 until now, the agent industry has become one of enormous change. Industry giants such as IMG, Octagon, and SFX, among others, once unfamiliar to the sports world, have used their purchasing power to buy the businesses of boutique agencies, 3 building an arsenal of athletes and leverage that has made it difficult for smaller firms to compete.4 At the same time, agents have begun to specialize, usually 5 representing players in only one sport and often players at only one position. Perhaps most significantly, instances of unscrupulous and incompetent 1. See Cameron Crowe, Jerry Maguire Movie Script (2006), available at http://www.godamongdirectors.com/scripts/errymaguire.txt. 2. Rod Tidwell became Jerry Maguire's only client following Jerry's termination from Sports Management International by rival agent Bob Sugar, played by comedian and sports persona Jay Mohr. See id. 3. KENNETH L. SHROPSHIRE & TIMOTHY DAVIS, THE BUSINESS OF SPORTS AGENTS 38 (2003). An example of one such acquisition was the purchase of David Falk's Falk Associates Management Enterprises (FAME). Id. at 39. Falk, Michael Jordan's long-time agent, sold his practice to SFX for $82.9 million, including $38.75 million up front and $15 million in bonuses per year for five years if FAME met certain cash flow requirements. Richard Sandomir, Sale ofAgency Opens New Doorsfor Falk and Clients, N.Y. TIMES, May 6, 1998, at C6. 4. See SHROPSHIRE & DAVIS, supra note 3, at 45-46. 5. See Peter Keating, Crash Landing, ESPN THE MAGAZINE, Apr. 1, 2002, available at http://espn.go.com/magazine/vol5no07steinberg.html. MARQUETTE SPORTS LA W REVIEW [Vol. 18:1 conduct by agents, including one involving hip-hop mogul Percy "Master P" Miller, 6 have finally led Congress to draft, and George W. Bush to sign, the first piece of federal legislation regulating agent conduct. 7 This legislation, the Sports Agent Responsibility and Trust Act (SPARTA), was signed in 2004.8 Today, while Jerry Maguire would no doubt find it difficult to compete independently, his biggest competitor may not be specialty-agents or even large umbrella corporations with 300-plus clients; his biggest competitor may be himself. Some may recall that Jerry Maguire was a lawyer, not just an agent. 9 While SPARTA imposes penalties on agents who do not follow the rules, 10 it is the lawyer-agents who still remain at a large competitive disadvantage with their non-lawyer counterparts." Specifically, attorney- agents are still held to a higher standard of care for negligence claims and governed by an unforgiving code of professional conduct, the violation of which could lead to disbarment.12 Also, and often overlooked, attorney-agents may be precluded from recovering for services rendered in a state where they are not licensed if they are determined to have engaged in the "unauthorized practice of law,"' 3 a phrase that courts have defined broadly. 14 This comment will address how, despite being a highly regulated industry, the business of sports agents exists in competitive imbalance. Because courts 15 have held that attorneys are always attorneys even when acting as agents, and because they have broadly defined the "unauthorized practice of law" to 6. Mark's Sportslaw News, Williams Quits No Limit Sports: Fallout Over Controversial Contract Leads Saints' RB to Steinberg, Mar. 27, 2000, http://www.sportslawnews.com/ archive/Articles%202000/WilliamsSteinberg.htm. Leland Hardy, an agent with No Limit Sports, created by Master P, negotiated an incentive-loaded contract for then New Orleans Saints' running back Ricky Williams, which included mostly bonus money and little guaranteed salary. Id. 7. See Sports Agent Responsibility and Trust Act: Hearing on H.R. 361 Before the Subcomm. on Commercial and Admin. Law of the Comm. on the JudiciaryH.R., 108th Cong. 29 (2003) (statement of Scott Boras), available at http://commdocs.house.gov/committees/judiciary/hju87094.000/ hju87094_0.HTM. 8. Melissa Steedle Bogad, Note, Maybe Jerry Maguire Should Have Stuck with Law School: How the Sports Agent Responsibility and Trust Act Implements Lawyer-Like Rules for Sports Agents, 27 CARDOZO L. REv. 1889, 1904 (2006). 9. See Crowe, supra note 1. 10. Sports Agent Responsibility and Trust Act, 15 U.S.C. § 7804 (2006). 11. Tamara L. Barner, Note, Show Me the... Ethics?: The Implications of the Model Rules of Ethics on Attorneys in the Sports Industry, 16 GEO. J. LEGAL ETHICS 519, 523-24 (2003). 12. Idat521-22. 13. See David A. Gerregano, Annotation, What Constitutes "Unauthorized Practiceof Law " by Out-of-State Counsel, 83 A.L.R.5th 497 (2000). 14. In re Peterson, 163 B.R. 665, 672 (Bankr. D. Conn. 1994). 15. In re Pappas, 768 P.2d 1161, 1167 (Ariz. 1988) (citing In re Dwight, 573 P.2d 481 (1997)). 2007] DISBARRING JERRY MA GUIRE include many of the services athletes expect from agents, 16 attorney-agents risk losing everything, from their hard-earned money to their licenses. Prior to addressing the substantive issue, however, this comment will briefly explore the existing structure of the athlete agent industry and then evaluate the current state of agent regulation from all sources, both public and private. Finally, suggestions for bridging the competitive gap between lawyer and non-lawyer- agents will be presented. II. THE ATHLETE-AGENT BUSINESS: EVOLUTION AND THE CURRENT STATE OF THE LAW GOVERNING AGENTS As professional sports transitioned from chump-change in the mid-1900s to big business in the late 1970s and early 1980s, agents became commonplace, 17 forcing changes to the landscape of sports, not all of which were good. 18 Despite legislation from multiple entities-state, federal, and private-attempting to control rogue agents and their unscrupulous behavior, not all problems have been solved. 19 The current state of the law governing lawyer conduct creates a competitive disparity between lawyer-agents and their non-attorney counterparts. Therefore, despite a melting pot of regulations governing agent conduct, qualified and ethical attorneys may still find it difficult, if not impossible, to enter the profession without putting their licenses, reputations, and money up for grabs. A. Defining "Agent, "a Tumultuous Task The term "sports agent" has varying definitions and meanings depending on the context and depending on the source defining the term.20 The National Collegiate Athletic Association (NCAA) defines an athlete agent as "[a]ny person who represents any individual in the marketing of his or her athletics ability." 21 Meanwhile, federal and state legislatures have adopted their own definitions. 22 SPARTA's drafters defined "agent" as an individual who 16. See Birbrower, Montalbano, Condon, & Frank, P.C. v. Super. Ct. of Santa Clara County, 949 P.2d 1, 12-13 (Cal. 1998). 17. See SHROPSHIRE & DAVIS, supra note 3, at 10-11. 18. See id. at 99-100. 19. See Mark's Sportslaw News, supra note 6. 20. ROBERT H. RUXIN, AN ATHLETE'S GUIDE TO AGENTS 10 (4th ed. 2004). 21. NAT'L COLLEGIATE ATHLETIC ASS'N, 2005-06 NCAA DIVISION I MANUAL art. 12.3.1.2(a), available at http://www.ncaa.org/ibrary/membership/division-i-manuaU/2005-06/2005-06 d I manual.pdf. 22. Compare 15 U.S.C. § 7801 (Supp. 2004) with WIS. STAT. § 440.99 (2005-2006). MARQUETTE SPORTS LA W REVIEW [Vol. 18:1 "recruits or solicits a student athlete to enter into an agency contract." 23 has adopted the same definition but adds that an agent can be Wisconsin 24 anyone "who represents to the public that the individual is an athlete agent." It is clear that the definition of "sports agent" is varied. Regardless of the definition used, today's sports agent performs a variety of tasks for his or her athletes that extend beyond simply negotiating the athlete's playing contract with a team.25 The modem-day agent not only manages and negotiates playing contracts, but also determines his athletes' market value, uses that value to his players' advantage by securing and sustaining endorsement revenue for the players off the field, secures personal appearances for the players, acts as a speaking agent for the players when dealing with the media, and counsels his rookie clients on pre-draft planning and preparation, including scheduling workouts, creating media kits and marketing collateral, and generally easing the players' concerns as draft day approaches. 26 More and more, agents are performing these and other services 27 for their athletes well into retirement. In addition, savvy businessmen and lawyers have begun to dominate the profession by offering specialty services beyond those offered by traditional agents.